From the September 1997 issue of Entrepreneur

You've heard all the buzzwords: global marketplace, global network, global this, global that. Yes, the world is getting smaller, and these days, no one blinks an eye when an American boasts of doing business with China, marketing a product in the Ukraine or setting up shop in the land down under.

By the same token, foreigners are coming to the United States in record numbers to do business and study. In the 1995-96 school year, 453,000 foreigners attended a U.S. college or university, compared with just 154,000 in 1974-75. And that's not counting the hordes of business executives who traverse the Atlantic or the Pacific each year to do some wheeling and dealing American-style.

Sometimes the only thing standing between a foreigner and the American dream is the perplexing English language, with its fast-changing slang and impossible pronunciations. What other language has so many pronunciations for a single letter? For native English speakers, it's no problem, but for the rest of the world, it can be a real tongue twister.

Now, what's considered a stumbling block to foreigners has opened a wealth of opportunity in the States for schools that teach English as a second language (ESL).

Learning The Lingo

Sure, most foreigners can learn English in their own countries, but simply hitting the books is far different from speaking, understanding and doing business with fast-talking natives. Learning the language in an English-speaking country takes top priority with many foreign business executives and students. And thanks to the near-worldwide appeal of the American culture, American English edges out the snootier British English and all other variations.

"American English is definitely the most popular among people who want to learn English. Most people who want to study English want to come to the States," says Ellyn Levine, owner of the English Language Center in Boston. Levine has been in the ESL business since 1978 when she opened her first school in Los Angeles after being laid off from teaching English at the University of California, Los Angeles (UCLA).

"I really liked teaching, and I didn't want to ever get laid off again. And the only way to avoid that was to be my own boss," says Levine, echoing the sentiments of thousands of other business owners. The teacher's former colleagues at UCLA began referring their international students to Levine's center, and her business was underway.

Seeing an increasing demand for ESL, Levine began adding more schools in 1990 and today has four locations, two of them in the Boston area, the others in Los Angeles and Santa Barbara, California. Levine's business, which brings in more than $5 million annually, isn't the only ESL school on a growth track. "Back in 1990, there were only a few ESL schools in Boston," says Levine. "Now there are about 15."

ABC's Of ESL

Talk about a booming business. "The market's potential is endless," says Gail Raimi Dreyfuss, adding that about three-quarters of people worldwide aren't native English speakers. Dreyfuss founded the Wisconsin English Second Language Institute (WESLI) in Madison, Wisconsin, with husband Jeff in 1981.

At WESLI, which is conveniently located near the University of Wisconsin, most ESL students generally fall into one of two categories: college-bound students and business executives. "We both had Ph.D.s in linguisitics, but we couldn't find two university jobs in the same city," says Dreyfuss. "We decided to start an English school and did all the teaching ourselves. By sheer luck, we got 50 students when we opened."

Today, WESLI has so many students and so much business, the Dreyfusses don't have time to teach anymore. That task is left to a teaching staff of 35.

Some ESL entrepreneurs may have linguistics backgrounds, but you don't need a related degree or even a license (except in a few states) to open an English school. Just ask Joe Stipek. He got his first taste of teaching English as a tutor to business executives in France in 1988.

Upon his return to the United States, he took a job with an ESL school in Texas, and in 1991, he and his wife purchased the school and began expanding it. Today, Intensive English Institute (IEI) is based in Portland, Oregon, has six locations nationwide, about 400 students and 50 teachers, and brings in about $5 million in annual revenues.

As for why Stipek wanted to purchase that first school, "I saw that the industry was expanding--there's a huge increase in the number of foreign students coming to the U.S.--and with the right marketing, I knew IEI could expand as well."

Know The Rules

Finding clients for ESL schools requires a lot of get up and go. Traveling overseas to meet with study-abroad agencies, colleges and universities ranks high on the marketing to-do list. Some ESL schools use agents in foreign countries to cull clients, while others advertise in foreign publications to get the word out to potential students.

Smart marketing, yes, but unfortunately, that isn't always enough to seal the deal. Other factors over which ESL school operators have little control can come into play. Uncle Sam's immigration policy has a hand in the success or failure of ESL schools on American soil, as does the exchange rate of the dollar and relations between the U.S. government and foreign countries. All these factors can stand in the way of even the most effective marketing plan.

"We have two battles when it comes to getting students: promotion in foreign countries and getting the State Department to issue student visas," says Stipek. "In both those areas, we have little support."

While American ESL school owners struggle to overcome these obstacles, their competitors are gaining on them. And the competition isn't the other school down the street. "Our greatest competition isn't other American ESL schools, it's ESL schools in Canada, the United Kingdom, New Zealand and Australia," says Stipek.

In those countries, regulations on student visas are decidedly more lax, allowing more foreigners in and therefore more potential ESL students. And some foreign countries go beyond that, actually setting up marketing offices abroad to entice students and business executives to use their countries' ESL schools. That's tough competition for Americans who scramble to find agents abroad who will pitch in on the marketing front.

Stipek, along with other ESL operators, is determined to make headway. As a member of the Executive Board of the American Association of Intensive English Programs (AAIEP), Stipek is in ongoing discussions with the U.S. Departments of Commerce and State to establish commercial offices and ESL trade fairs overseas and to relax the requirements for issuance of student visas.

If their efforts are successful, it could mean an explosion in the ESL market--and it could help start-up entrepreneurs such as Donna Scriven, who recently put out her ESL shingle. Scriven, who taught ESL in Italy, Spain, Chile, Portugal and Costa Rica, is now hoping to do the same on her own turf.

Her company, English a la California, brings one to three students at a time into her home in Kentfield, California, and offers formal grammar and listening activities in addition to a daily breakfast for about $100 a day. "One of my former students said to me, `Only $100 a day! A Spaniard would expect to pay that much just for the hotel,' " says Scriven, whose first students arrived this summer.

Pricing an ESL program depends on several factors: the length of stay, whether or not housing is provided, and extracurricular actitivies such as sightseeing. At IEI, prices average $1,500 plus off-site room and board for an eight-week program that focuses on the academic aspects of language acquisition, not on sightseeing.

But at Levine's English Language Center, where tuition costs $1,000 to $1,500 for two to four weeks plus housing, sightseeing activities are a big part of the program. Depending on the school location, her students head to New York City, Disneyland, Universal Studios or Magic Mountain. "That's what's unique about my schools," says Levine. "We do everything. We never say no."

Like most ESL schools, Levine's caters to individuals and groups, including some unique students who need rather specialized vocabulary. Levine's English Language Center shot basketball terms at Vlade Divac of the NBA's Charlotte Hornets and coached a class of Boston Bruin recruits from Eastern Europe on hockey lingo. You can bet they learned the most important words to any athlete: "Show me the money."

Speaking Of Which . . .

  • There are 24.5 million foreign-born people in the United States.
  • 13.8 percent of adults speak a non-English language at home.
  • 5.76 million adults rate their ability to speak English as "not at all" or "not well."

Source: U.S. Census Bureau

Want To Know More?

  • The American Association of Intensive English Programs (AAIEP) promotes ethical and professional standards for ESL programs and lobbies on behalf of ESL schools. AAIEP gives its seal of approval to qualified programs. Call (215) 895-5856.
  • The Accrediting Council for Continuing Education & Training (ACCET), a nonprofit organization, is the only national accrediting agency recognized by the U.S. Secretary of Education for accrediting intensive English programs. For information on the accrediting process, call (202) 955-1113.
  • The National Association of Foreign Student Affairs (NAFSA) offers workshops, publications and an annual convention for ESL teachers. Call (202) 462-4811 or check the NAFSA Web site at http://www.nafsa.org

Frances Huffman, a freelance writer in Pacific Palisades, California, is a former senior writer for Entrepreneur.

Contact Sources

American Association of Intensive English Programs, (215) 895-5856, http://www.outfitters.com/com/aaiep

English Language Center, (617) 536-9788,

English a la California, e-mail: donnas@4english.com, http://www.4english.com

Intensive English Institute, 8335 S.W. 22nd Ave., Portland, OR 97219, http://www.iei-usa.com

Wisconsin English as a Second Language Institute, (608) 257-4300, http://www.wesli.com